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Hoteliers ignore Colombia's unrest
Hotel & Motel Management / April 22, 1996

By Larry Luxner

MEDELLIN, Colombia -- Despite its lush tropical flowers, breathtaking mountain views and palm-fringed Caribbean beaches, Colombia isn't exactly a tourist's paradise. Visitors are warned never to hail taxis off the street, and multinational executives routinely carry kidnap insurance in this Andean nation, where an alarming 77.5 per 100,000 citizens were murdered last year -- making Colombia one of the most violent nations on Earth.

Making matters worse, Bogotá's Eldorado International Airport is one of only three in the world declared unsecure by the Federal Aviation Administration (the other two were in Nigeria and the Philippines).

On March 1, Colombia received the ultimate blow to its prestige, when the United States -- concluding that President Ernesto Samper hadn't done enough to fight the drug trade -- decertified Colombia, thereby disqualifying it from direct U.S. economic assistance and lumping it together with such pariah nations as Afghanistan, Iran and Libya. Even the country's subsequent assassination of Cali drug lord José Santacruz Londoño, less than a mile from the Hotel Inter-Continental in Medellín, couldn't reverse Washington's decision.

Yet even with all the chaos, Colombia's hotel boom -- fed by a healthy economy and billions of dollars in laundered drug money -- continues with no end in sight. Over the last few months, three large hotel chains have all announced plans to build luxury properties throughout Colombia.

"In spite of everything, people are coming," says Jorge Valencia Caro, an advisor to the Bogotá Hotel Association. He estimates that between 1990 and 1995, some 2,700 hotel rooms were added in Bogotá -- a metropolis of seven million people. "There's been a surge in international franchises here. This gives a lot of confidence to foreigners, especially Americans."

In 1995, according to the 1,600-member National Association of Travel Agents, 1.4 million people visited Colombia, of which 500,000 came for business reasons, 200,000 were Colombians living overseas and 700,000 came as conference attendees. Together, they generated $700 million in foreign exchange.

"There's a lot of money in the economy," says Valencia. "This has generated lots of construction and jobs."

At the end of 1995, he said, there were 46,123 hotel rooms in 1,321 properties throughout Colombia. Bogotá had 6,839 rooms in all classes, of which 1,903 were in five-star hotels and 1,608 in four-star hotels. The average occupancy rate was 56%, and the average cost of one night in a luxury hotel in Bogotá was $144 -- though some properties such as the Casa Medina ($225) and the Charleston ($235) were considerably pricier.

The largest is still Bogotá's downtown Hotel Inter-Continental Tequendama, which was inaugurated in 1953, has 630 rooms and is considered Colombia's "flagship" hotel. The Inter-Continental also has properties in Medellín and Río Negro, and is building a hotel in Cartagena to open in early 1997.

José Manuel Lovatón, general manager of the 320-room Inter-Continental in Medellín, said that in 1992, "the city's bad image was justified, but not anymore."

"The year drug baron Pablo Escobar was shot, we had a 6% rise in our occupancy rate," he said in an interview here. "The greatest news we all received was the downfall of the Cali cartel. All of them are behind bars. The image of insecurity is in the past."

According to Valencia, the administration of former president Cesar Gaviría spent $500,000 taking out full-page ads in The Washington Post, The Miami Herald and The New York Times telling Americans it was safe to visit Colombia.

While Medellín -- or Colombia in general -- can hardly be considered a model of security, investments in new hotels are continuing at a record pace.

ITT Sheraton and Bogotá-based Prointel Ltd. have agreed to develop eight mid-priced Four Points hotels throughout the country by 1999. The first to open will be a conversion of Bogotá's 93-room Hotel Regency, followed by a 123-room hotel in Medellín set to open this summer. Later, a 120-room resort will be inaugurated in Santa Marta, on the Caribbean coast. In 1997, two more sites will open: a 375-room property in downtown Bogotá costing $85 million, and a 133-room hotel in Cali.

The remaining hotels -- in Cartagena, Barranquilla and Bucaramanga -- should open in 1998 and 1999.

Prointel President Jorge Londoño says he's confident that "both our existing hotels that are converting to Four Points Hotels, as well as our properties under development, will benefit tremendously from the ITT Sheraton association and the brand positioning of Four Points Hotels," which offers meeting space and catering facilities; on-premise, three-meal restaurant; business services; in-room dining; laundry services, swimming pool, fitness facility and in-room desk and working space.

Separately, Spain's Grupo Sol Meliá will add six Colombian properties this year to the two it already has: the 198-room Meliá Pereira, located in that city's business district, and the 53-room Meliá Santafé in Bogotá's upscale Santa Barbara neighborhood.

"The diversity of Colombia's destinations and traveling public are of great interest to us," said Evagrio Sánchez, executive vice-president of the chain's Americas division. Slated for opening in 1996 are the 192-room Sol Arahuco in Rodadero, Santa Marta; the 219-room Sol Caribe Campo on the island of San Andrés, an all-inclusive property; and the 230-room Sol Caribe Centro, featuring the largest disco on San Andrés. Opening next fall are the 90-room Meliá Cali and the Sol Providencia, located on a coral island known for its ecological diversity.

Late last year, Days Inns of America Inc. signed a master license agreement with Bogotá hotelier Moisés Carreno for the development of at least 1,000 hotel rooms in Colombia over the next five years. Under the agreement, Bogotá's historic Hotel Nuevo Gaudaira was renamed the Days Inn Melgar. Carreno says he expects to open four additional three-star properties in Bogotá, Cali, Medellín and Pasto by mid-1996.

Finally, Promus Hotel Corp. chose Bogotá for its first Embassy Suites property in South America. The 98-room hotel, owned and operated by German Morales e Hijos Orga-nización Hotelera Ltda., is located on Calle 70, in the heart of Bogotá's financial district.

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